Tuesday, March 27, 2007

King also refused to say that house prices in the UK are over-valued and argued that much of the rise was perfectly understandable even though they appear high relative to earnings.

BoE's King says impact of modest fall in UK house prices will be limited

We are all screwed King has said he will support house prices if they start to dip:The problem would be 'much more severe' if large falls materialise, though he stressed that the central bank would take offsetting action in the event that the decline came as a result of an external shock.

Posted by daniel @ 02:36 PM (490 views)
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6 thoughts on “King also refused to say that house prices in the UK are over-valued and argued that much of the rise was perfectly understandable even though they appear high relative to earnings.

  • I don’t see anything in there to say that they will try and support house prices if they fall. What he is saying is that if falls are moderate then this will have a limited effect on most households – hardly earth-shattering. I suspect his refusal to say explicitly that house prices are overvalued is just down to caginess on the day – he has basically said as much before.

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  • that’s pure spin, really… the MPC has been already taking “offsetting action” by keeping the base rate low, while they should have raised it to 6% level to fight inflation. In addition, they are doctoring the CPI and making statements like the ones of today. But they only have limited room to manouver if they want to – at the same time – sustain property values, keep inflation under control, sustain the currency and still attract close to 1m of BTL’s who will try to cash in when they realize that property offers lowers net returns of a savings account… it is honestly difficult to see how the BoE can make the situation worse (or better) than it is already….

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  • Its all over for Britain then.

    Fortunately i was running only a 10 delta (10% probability) of any kind of official sanity and have my own private lifeboat ready.

    Time to cue up the evacuation plan and move East.

    Its going to be no fun living amongst a group of clawing, angry destitute people remembering the good times that can never be again, for the next 20 years.

    If you are ever in the East I may see you around.

    Have a good one.

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  • This is not in the Bank’s remit.

    Let’s get this straight – they’ve just admitted that they created the boom and now they’re confifrmed that they’re going to step in to prevent the bust?

    I hope the market starts punishing them for this kind of interventionism.

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  • Wannabeemigre says:

    What tools would they use?-they have sold the life jackets and oars already-all they have left is the life raft!!

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  • The BoE will forget about the housing market when the dollar and Sterling start to take a pounding. The HPC will simply be a by product of the collateral damage caused by currency speculation.

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